IRS Audits

IRS audits can be triggered by certain items on the taxpayer’s return or randomly as part of a compliance research examination.  If the audit is random, it is usually much more comprehensive.  Consequently, the IRS may want the taxpayer to provide substantiation for several items on the return.

The IRS can assess additional tax within three years from the date the return is filed ( or due date of the return).  Interest accumulates on this tax from the time it was initially due.   The IRS can abate both interest and penalties however certain rules apply.  For instance, there must be reasonable cause to abate penalties.